The rumor mill has been churning nonstop over the past week about Dewey & LeBoeuf. In our recent stories about the firm, we’ve discussed reports of financial difficulties, partner departures, and possible layoffs of lawyers and staff.
During this time, firm management has remained fairly tight-lipped. But earlier this evening — a Friday evening, of course — the firm broke its silence. Chairman Steven H. Davis sent out a firm-wide memo, acknowledging the rumors and confirming that yes, Dewey will be conducting some layoffs and engaging in other cost-cutting measures.
Let’s take a look at the memo….
We’ve reprinted the memo in full on the next page. It begins:
Dewey & LeBoeuf has, in the last couple of days, been the subject of press stories on U.S. legal blogs. These have focused on rumors regarding the firm’s financial performance, recent partner departures, and certain cost-reduction measures being implemented by the firm. We had planned to communicate these measures to the firm when we knew exactly how they would impact individual offices and departments, but given the recent press attention, I would like to explain the reasons behind the firm’s current actions.
The term “U.S. legal blogs” sounds a lot like a reference to Above the Law. But in fairness to our MSM colleagues, Casey Sullivan of the Daily Journal (sub. req.) has been covering Dewey quite closely as well.
Here’s the heart of the memo:
The firm enjoyed many successes last year and saw improved financial performance, with an increase in revenues in 2011. In addition, we have achieved significantly higher revenues so far this year than in January/February 2011. At the same time, however, we, like some other firms, have also experienced a significant increase in our cost base.
Notwithstanding our results in 2011 and so far this year, the firm’s Executive Committee has decided to take proactive steps to align the firm’s resources with anticipated demand and strengthen the firm’s competitiveness in the global marketplace. Some recent partner departures have been consistent with the firm’s strategic planning for 2012, and we expect some additional partners to leave. In addition, we are reducing the number of lawyers and administrative staff globally by approximately 5% and 6% respectively. While decisions of this nature are necessary to ensure the firm’s competitiveness, they are always difficult and we very much regret the impact they have on our colleagues who are affected.
It sounds like there may have been some truth to the reports of recent layoffs at Dewey. (But query whether the cuts being discussed in this memo are in addition to any layoffs that have already transpired.)
According to the firm website, Dewey has over 1,100 lawyers around the world. The layoffs announced today should affect 50 to 60 attorneys.
In the meantime, voluntary departures from Dewey continue. We understand that about half a dozen associates and counsel in the Los Angeles, New York, and D.C. offices of Dewey have jumped over to Sidley Austin (which recently picked up a few Dewey partners, in L.A. and D.C.).
What else are we hearing about Dewey? Sources report the following:
- The firm is experiencing some issues with respect to partner payroll.
- Associate hiring and salaries over in the Frankfurt office are frozen.
- Dewey lawyers are being approached left and right by legal recruiters.
buzzards recruiters are circling. This morning, hours before Steve Davis’s memo went out, one Dewey associate received the following email from a psychic recruiter:
By now I’m sure that you are getting rather anxious. The atmosphere in the office has to be off the wall!
I know that partners and counsel are already talking to recruiters about exit strategies. Don’t you think it’s time for you to take care of yourself as well?
Please call me so that we can discuss your options. I’ve been a legal recruiter for close to 20 years. I also have an MBA and a JD. I think I can help. You just have to make the call.
I look forward to speaking with you.
It seems a bit… overzealous, if you ask me. But, on the other hand, it’s better to be looking for a job — or, if you’re a recruiter, trying to place a candidate — before the layoff notices go out to the unlucky five percent.
UPDATE (3/3/12): We understand that most of the affected associates have already been notified of their fates. For the two dozen or so partners who are being asked to leave, the departure process will unfold over the course of March.
Good luck to everyone at Dewey. These are certainly stressful times, but hopefully the measures being undertaken will help to stabilize the ship.
(You can check out Steven Davis’s full memo on the next page.)